Author: Robert Sweeney April 2021 - TASC
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Author: Robert Sweeney
April 2021
Job quality in the Irish construction sector Executive Summary
Published by:
CIOB
Fitzwilliam Business Centre
77 Sir John Rogerson’s Quay
Dublin 2
TASC
28 Merrion Square North
Dublin 2
Ireland
Tel: +353 1 616 9050
E-mail: contact@tasc.ie
Website: www.tasc.ie
Twitter: @TASCblog
© CIOB 2021 / TASC 2021
The present report does not represent the collective views of CIOB and TASC, but only of the
respective authors. The responsibility of CIOB and TASC is limited to approving its publication
as worthy of consideration.
With the financial support of the Chartered Institute of Building.
978-1-9993099-2-3
3Job quality in the Irish construction sector Table of Contents 4
Foreword
5Job quality in the Irish construction sector
Foreword
I am delighted that the CIOB has teamed up with TASC to publish this important piece of work. Given
the CIOB’s growing policy and research presence in Ireland, it is fitting that we are providing a data-
driven study of the state of play in Ireland’s construction sector.
Construction affects everyone, influencing productivity and wellbeing, creating the homes, hospitals,
schools, workplaces, and infrastructure essential for a good quality of life. It is therefore important to
reflect on the sector itself, so we can continuously improve the quality of life and career prospects of
those working in it, now and in the future.
There are encouraging findings in the report. The data shows that construction managers and qualified
professionals in the sector are highly paid relative to other sectors. This reflects the important work they
do. In addition, the high levels of job satisfaction and autonomy across the construction sector reflect
the visible contribution construction makes to society.
Our Charter means that the CIOB acts in the public interest and, as such, we must make sure we tackle
the issues raised in this report. The cyclical nature of construction work is the source of many of the
challenges facing the sector and, while the report describes a sector that has evolved, there is still a lot
of work to be done to improve inclusion and diversity and to open up conversations on other workplace
issues, including mental health. We have made six recommendations for policy makers and industry
leaders to implement, which will make a start with a targeted approach to addressing the challenges
raised in the report.
My hope is that this report will be an aid to policy makers, industry leaders and professionals, academics
and students and anyone attempting to understand the changing nature of the construction sector –
and help us improve our sector and move it forward.
Caroline Gumble
Chief Executive Officer,
The Chartered Institute of Building (CIOB)
6Introduction
7Job quality in the Irish construction sector
Introduction
The emergence of Ireland from the financial crisis that began in 2008 has been a long process.
Consecutive years of cuts to public spending and increases in income and other taxes depressed
economic activity. The construction sector was the hardest hit of all, and was also reeling from the
effects of the collapsed housing bubble. The massive shedding of jobs led to a major loss of skills and
know-how. People with knowledge built up from years of training and working in the sector could no
longer find employment in the country, and so many emigrated. When the economy eventually began
to recover, it is not surprising that the sector had a hard time in meeting the demands that were being
placed on it.
The arrival of Covid-19 revealed society’s dependence on the less-celebrated sectors of the economy.
This is most apparent in the low and less well-paid sectors such as hospitality and care, but it is also
true of construction. The lockdowns and restrictions, while justified on public health grounds, have
threatened the slow but improving increase in construction of housing and infrastructure in recent
years. With much of the workforce required to remain at home, the risk is that the sector is once again
ill-equipped to meet the pent-up demand that has been growing.
It is therefore essential that working in construction remains an attractive career. In a world of declining
manufacturing employment and the emergence of often precarious and poorly-paid service jobs,
construction work offers a realistic path to improve one’s living standards and, at the macro level,
facilitate social mobility. This is and has been the case for working class men in particular who, it will be
seen, are the traditional entrants into the industry. It is also true of non-nationals, who since the 2000s
have comprised a significant share of the workforce. Women, however, remain a minority group, despite
advances elsewhere in the world of work. With the world much changed since 2008, and the likelihood
of an even more different one post-Covid, the future path of construction work is yet to be tread.
Construction, of course, goes beyond the on-site workforce. It is considered to include all of those who
directly contribute toward the making of the built environment. That means not only electricians, block
layers, and so on, but architects, engineers and indeed health and safety officers, administrators, and
more form part of the sector. A diverse range of occupations work in the sector, though craft occupations
or ‘trades’ remain the most prevalent.
8Executive Summary
9Job quality in the Irish construction sector
Executive Summary
This report is an examination of job quality in the Irish construction sector. Job quality is multi-dimensional,
and there are many ways to broach the subject. One aspect of employment is contractual stability. In
recent years there has been growth in low paid, less-skilled, unstable service jobs in the wider economy.
This can raise job-related stress, inhibit family formation, make access to accommodation difficult, and
more. Stability of employment is therefore an important consideration in any assessment of job quality.
We will show that for most of the 2000s the level of precariousness in the construction sector was similar
to the rest of the economy. Unsurprisingly, the financial crisis resulted in a steep decline in contractual
stability as much of the workforce were made unemployed and firms struggled during the downturn.
As the economy has recovered, so has stability of employment in the sector, and construction now has
a lower proportion of temporary contracts compared to the rest of the economy. However, the recovery
has been incomplete, and solo self-employment seems to be a particular problem.1 The cyclicality of
the sector is at the root of many of the problems it faces including productivity, labour shortages, and job
stability. We argue that addressing this boom-bust cycle needs to be a policy priority for Government.
Arguably the most important aspect of job quality is pay, which for many is the raison d’etre of
employment. But how is the quality of pay to be measured? A simple hourly or annual monetary rate
tells us something but doesn’t offer a benchmark against which quality can be assessed. Surely, pay is
best assessed against the capacity of an industry and society to deliver it. But do international standards
also matter?
We find that pay in the Irish construction industry is, on average, good. Pay is close to but somewhat
below the national average wage. This puts Ireland around but slightly above most other EU countries.
There is, though, much variation between the occupational groups. White collar construction workers
are very well-paid, whereas blue-collar workers are somewhat below EU norms. There are a multitude
of forces at play that push wages in different directions. This includes labour market institutions,
productivity performance, and more.
If pay and terms were the only constituents of job quality, there would be little need to compensate
for the various qualities of a job that make it difficult. In reality, the onerousness or ease of everyday
activities make some forms of work more or less desirable, which is sometimes reflected in the pay.
The list of in-work aspects of job quality is potentially endless. It could include workplace monotony,
frequency of social interactions, quality of social interactions, autonomy, and more.
We favour a parsimonious approach that looks at how certain in-work components of job quality
have evolved over time. As with pay and contractual terms, we also compare in work job quality in
construction to the wider economy. The list of in-work indicators is certainly not exhaustive - most of are
chosen on grounds of being general indicators of job quality while some are selected because of their
relevance to construction. Construction workers report higher levels of autonomy than the workforce at
large. Construction workers also report higher levels of feeling they are doing something useful in their
work. Overall, the survey data suggests that construction provides for meaningful work where skills are
applied to produce a tangible product to the benefit of society.
1 Though there is not an agreed upon definition, the bogus self-employed are those whose situation is comparable
to that of employees, but who are classified as independent contractors (see Oireachtas, 2019; Revenue, 2019).
10Executive Summary
However, there is evidence that those in the sector are under more time pressure since the crisis. As we
will show, there is also evidence that the social environment, especially bullying, is a problem, though it
is not always reflected in surveys. Furthermore, the sector is still quite homogenous and, although the
number of women working in the sector has increased significantly in recent years, there is still work to
be done to diversify the labour pool. Construction work remains hazardous compared to other forms
of work, though health and safety standards have improved significantly. The picture then is nuanced.
The report is organised as follows. Section 2 provides some context by looking at the boom-bust
cycle in Ireland and the attendant skills and labour shortages that followed. Section 3 looks at the
demographic make-up of the sector and evolution of contractual terms. Section 4 looks at income and
pay, while Section 5 looks at in-work conditions. Section 6 offers some discussion, concluding thoughts,
and policy recommendations
11Boom, bust, and
the construction
workforce
12Boom, bust, and the construction workforce
Boom, bust, and the
construction workforce
Boom and bust in the Irish property market
The Irish housing market and construction sector have undergone much turbulence in the past two
to three decades. A cycle of boom and bust has emerged, as in many other countries around the
world. This cycle posed major challenges for the stakeholders involved, which includes households,
policymakers, firms, and, of course, construction workers.
The first major change occurred in the 1990s which witnessed a massive increase in mortgage credit.
The expansion of mortgage credit to new households expanded the pool of buyers who could afford to
purchase a home. As the supply of housing is relatively fixed in the short-term, the greater availability of
credit led to a large increase in house prices, though it also led to a large expansion in house building.
This building, moreover, often took place in inappropriate locations. The increase in credit in this period
was first and foremost a result of regulatory changes in the banking system (Sweeney, forthcoming).
These trends can be seen in the figure below. It shows the trajectory of new mortgage loans approved
and mortgage debt outstanding, both as a percentage of national income. However, mortgage loans
approved relative to national income is converted to an index with 1990 as the base year with value 100.
A value of 150 in a given year means that mortgage loans approved (relative to GNI*)2 are 50% greater
than (relative
in 1990. to
Mortgage
GNI*) 2 debt outstanding
are 50% remains
greater than as a percentage
in 1990. of national
Mortgage debt income,
outstanding whose
remains as avalues
can be read from
percentage the right-hand
of national income,axis.
whoseThevalues
figurecan
also
beshows housing
read from output
the right hand–axis.
the number of also
The figure new units
built shows housingasoutput
– expressed – thewith
an index number
1990of
asnew
the units
base built
year. –Some
expressed
of theasactual
an index with 1990
housing as numbers
supply the
baseshown.
are also year. Some of the actual housing supply numbers are also shown.
Figure 1: Boom and bust in the Irish housing market.
Figure 1: Boom and bust in the Irish housing market.
Sources:
Sources: Mortgage
Mortgage loans
loans approvedbased
approved based on
onCSO,
CSO,housing
housingoutput based
output basedon CSO and Housing
on CSO Agency,
and Housing and and
Agency,
mortgage
mortgage debt
debt outstandingbased
outstanding based on
on Central
CentralBank.
Bank.National
Nationalincome
incomefigure based
figure on GNI*
based from
on GNI* CSO.
from CSO.
2 GNI* is a measure
As can be seenofboth
national income
housing commonly
output used in Ireland
and mortgage instead
lending wereof GDP.
quiteIt stable
attempts to strip
from 1970outto
thethe
distortions caused by tax shifting of multinationals which inflate GDP in Ireland.
beginning of the 1990s. Lending then began to accelerate rapidly, increasing four and a half fold 13
by its peak in 2006. Housing output follows a similar trend. As evidenced by an index value of
100 in 1990 to almost 500 in 2006, output in that year was almost five times what it was a decadeJob quality in the Irish construction sector
As can be seen both housing output and mortgage lending were quite stable from 1970 to the
beginning of the 1990s. Lending then began to accelerate rapidly, increasing four and a half fold by
its peak in 2006. Housing output follows a similar trend. As evidenced by an index value of 100 in 1990
to almost 500 in 2006, output in that year was almost five times what it was a decade and a half or
so previously. This is well in excess of anything that could be explained by economic fundamentals
such as population growth. When the bubble burst, both the supply of housing and credit contracted
rapidly. Since the recovery around 2012, housing supply increased only slowly. With a pre-Covid output
of just over 20,000 units, however, supply was around historical trends. As we shall discuss later, there
is a strong case to be made that a housing shortage continues to exist. Though new mortgage loans
approved appears to have rebounded as well, the stock of mortgage loans outstanding has fallen. This
outpaced new lending.
is due to the fact that repayments of mortgages have outpaced new lending.
Allied to this, the source of housing construction has become more reliant on private investment
Allied to this, the source of housing construction has become more reliant on private investment over
over time, with a fall away in local authority construction in particular. Having constructed a
time, with a fall away in local authority construction in particular. Having constructed a significant share
significant share of housing in the 1960s, 70s, and much of the 80s, local authority building has
of housing in the 1960s, 70s, and much of the 80s, local authority building has almost totally ebbed
almost totally ebbed away. There are many reasons for this including:. the centralisation of funding
away. There are many reasons for this including. the centralisation of funding for public housing away
for public housing away from local authorities to central government; and changes in planning
from local authorities to central government; and changes in planning such that local authorities could
such that local authorities could opt out of enforcing public housing targets in private
opt out of enforcing public housing targets in private developments (Hearne, 2020: 121-123). This has
developments (Hearne, 2020: 121-123). This has exacerbated volatility in the housing market.
exacerbated volatility in the housing market.
Composition of construction
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Private Local Authority Houses Voluntary
Figure 2: House construction composition.
Figure 2: House construction composition.
Source: Housing Agency and CSO.
Source: Housing Agency and CSO.
In terms of affordability and prices, Figure 3 below shows a number of similar trends using a variety
In terms of affordability and prices, Figure 3 below shows a number of similar trends using Comme
of metrics. Real house prices refers to the inflation-adjusted price of housing. As can be seen, house of constr
a variety of metrics. Real house prices refers to the inflation-adjusted price of housing. As can be
prices were stable up to the 1990s after which they began to accelerate rapidly, and then declined. The
seen, house prices were stable up to the 1990s after which they began to accelerate rapidly, and
increase since 2012 has been similarly steep, albeit levelling off more recently. The price-to-income
then declined. The increase since 2012 has been similarly steep, albeit levelling off more recently.
ratio refers to the ratio of average house prices to average incomes. When the objective of having
The price-to-income ratio refers to the ratio of average house prices to average incomes. When the
a home is to live in it, then the rise in the cost of buying a home versus renting one makes renting
objective of having a home is to live in it, then the rise in the cost of buying a home versus renting
more attractive. This then puts upward pressure on rents so that the price-to-rent ratio should not
one makes renting more attractive. This then puts upward pressure on rents so that the price-to-
rent ratio should not change radically over time. If price increases had been driven by a shortage
14 of supply, for instance, one would expect rents to have also increased. During the 2000s house
prices increased much faster than rents. In other words, there was a speculative bubble as prices
increased much faster than what could be explained by underlying fundamentals. The increase inBoom, bust, and the construction workforce
change radically over time. If price increases had been driven by a shortage of supply, for instance, one
would expect rents to have also increased. During the 2000s house prices increased much faster than
the ratio since 2012 has been more muted than before. McQuinn’s data (2017: 9) indicates the ratio
rents. In other words, there was a speculative bubble as prices increased much faster than what could
has been essentially flat since the recovery as opposed to the increase shown here. Either way, the
be explained by underlying fundamentals. The increase in the ratio since 2012 has been more muted
greater stability of the house price-to-rent ratio in recent years shows that whatever has been
than before. McQuinn’s data (2017: 9) indicates the ratio has been essentially flat since the recovery as
driving the increase in house prices has also been driving the increase in rental prices, suggesting
opposed to the increase shown here. Either way, the greater stability of the house price-to-rent ratio in
an underlying lack of supply and not the existence of a bubble.
recent years shows that whatever has been driving the increase in house prices has also been driving
the increase in rental prices, suggesting an underlying lack of supply and not the existence of a bubble.
Figure 3: Affordability of Irish housing.
Figure 3: Affordability of Irish housing.
Sources: OECD.
Sources: OECD.
The single most important indicator of housing affordability is the house price-to-income ratio
which is The
alsosingle
shownmost
as animportant
index number and of
indicator with some actual
housing values is
affordability forthe
selected
house years. Using the
price-to-income
Daft
rationationwide house
which is also price
shown average
as an index based
numberonand
its with
quarterly
somereports (€257,970),
actual values and theyears.
for selected CSO Using
figure
for
theaverage full-time earnings
Daft nationwide (€48,946),
house price averagewebased
calculate
on itsthat house reports
quarterly prices were on average
(€257,970), and 5.3
the times
CSO
national average
figure for income
average in 2019
full-time (CSO,(€48,946),
earnings 2020; Daft,we
2019a-d). Daft
calculate thatfigures
houseare based
prices onon
were asking prices,
average 5.3
which
times track the official
national averageresidential
income in price index
2019 well 2020;
(CSO, which Daft,
is based on sale Daft
2019a-d). prices.figures
At the are
height of the
based on
bubble
asking itprices,
was over seven
which times
track the national
the official average,
residential whereas
price indexinwell
1990 a home
which wouldon
is based typically cost
sale prices.
around four times
At the height national
of the bubbleaverage earnings.
it was over sevenAlthough thenational
times the figure appears
average,towhereas
be declining, housing
in 1990 a homeis
currently considerably
would typically less affordable
cost around today
four times than what
national it wasearnings.
average historically, before the
Although theexplosion of credit
figure appears to
in
bethe 1990s. housing is currently considerably less affordable today than what it was historically,
declining,
before the explosion of credit in the 1990s.
The price-to-income ratio is preferable to monthly housing costs as a percentage of household income
The price-to-income
as affordability on this measureratio is flattered
can be preferable to monthly
if the paymentshousing costs over
are extended as amany
percentage of
years. For
household
renters, income
however, theasprice-to-income
affordability onratio
thisismeasure can be
less relevant. flattered
The relevantifstandard
the payments
for rentare extended
affordability
isover
rentsmany years.prices
not house For relative
renters,tohowever, the price-to-income
income. Whereas ratio is lessimproved
house price affordability relevant.a little
The inrelevant
recent
years, this has not been the case for rents, where affordability continued to decline into 2019 (Doval
Tedin and Faubert, 2020). The recent crisis has been severe and asymmetric with respect to owners
and renters.
15Job quality in the Irish construction sector
Labour shortages
The indicators examined so far point to a boom-bust cycle in property prices, output of building and
infrastructure, and affordability, and a construction sector that has substantially recovered since the
crisis. A similar picture emerges with the employment numbers. In 2006, construction accounted for
around eleven percent of employment, which fell to just over four percent in 2011 and 2012 (CSO, 2020).
In 2019, it was just over six percent (ibid.). The ebbs and flows in employment largely therefore reflect
those in output. Pre-Covid employment was back in line with international norms while output, recall,
was at around its historic levels. Construction employment should be higher if supply is to be increased
significantly.
A 2018 study by Technological University of Dublin in conjunction with the Construction Industry
Federation (CIF) provides a detailed analysis of skills in the sector (Ó Murchadha and Murphy, 2018).
Based on survey evidence, the study notes that apprenticeship training has lagged employment
growth in the recovery at most firms. Skills shortages have emerged across the full range of trades,
but the problem has been most acute in the so-called wet trades like bricklaying, plastering, painting
and decorating, and tiling. Some firms, perhaps due to being smaller, reported a shortage of skilled
electricians (ibid. 34). Firms cited financial barriers such as discontinuous demand for work, onerous
legislation, and costs of releasing workers to off-site training as reasons for not taking on apprentices.
Perhaps the largest reason, however, was a lack of suitable candidates for training, partly driven by
emigration (ibid., 8; 23).
The question arises as to whether firms have been able to find and hire workers in the required numbers
given the recovery of the sector. A 2019 survey by the Society of Chartered Surveyors Ireland and Price
Waterhouse Coopers indicates that skills shortages constituted the single largest factor holding back
construction output (PwC-SCSI, 2019). Skills shortages have been identified across a wide range of
jobs, in professional and craft occupations alike. The former comprises quantity surveyors and civil
engineers and for the latter bricklayers, carpenters, plumbers, and electricians have been found to
be in short supply. PWC’s 2018 survey reached the same finding, though shortages of civil engineers
were somewhat less acute (PwC-SCSI, 2018). The more common complaint was a lack of skilled
subcontractors as opposed to a lack of workers due to emigration (PwC-SCSI, 2017).
Skills Ireland (2020) examines in detail the future skills need of the sector. The perception and reality that
the sector is physically demanding is believed to be a deterrent on new entrants into the industry. The
image problem of the sector is also cited to be problematic. Demand for carpenters and electricians,
the numerically most common craft professions, and elementary or unskilled labour is projected to
be highest into the future. Skills Ireland also finds shortages in these and other craft occupations in
recently years. In 2020 many of the specific shortages were in professional occupations such as quantity
surveyors and engineers. They report that many of the shortages are cyclical and have arisen due to the
rapid growth of the sector in recent years (ibid.: 33-34).
Turning to publicly available data, one indicator of a labour shortage is an abundance of job openings
not being filled. The so-called vacancy rate is the ratio of the number of job vacancies to the sum of
employment and vacancies (potential employment). The higher the number, the greater the difficulty
employers are having in filling posts, all else equal. The vacancy rate in construction experienced a
steady, upward trajectory from 2008 to Q1 2015 when it stood at 1.2 percent. It then declined sharply
before increasing again to 1.5 percent in Q2 2018. Since then, it has been in decline and the latest figures
show it to be 0.3 percent, which is similar to the pre-crisis level (CSO, 2020).
16Boom, bust, and the construction workforce
It may seem surprising that the vacancy rate increased in the early years of the crisis. Given that there
are many people out of work, one would expect positions to be easily filled. A high vacancy rate in
conjunction with high unemployment signals that despite the fact that many people are out of work
firms are having trouble filling vacancies as the unemployed do not have the required skills – maybe
some skilled workers left the economy. It points to a need to upskill. The simultaneous existence,
however, of low unemployment and a high vacancy rate is a clear indication that the pool of workers is
not sufficiently large. It points to a need to expand the work pool. The uptick in the vacancy rate in the
last few years, then, is a sign of labour shortages which have since been alleviated, whereas the initial
increase from 2008-2012 in particular is consistent with a skills, but not people, shortage (see, also,
DPER, 2020a: 31).
Conefrey and McIndoe-Calder (2018) analyse post-financial crisis labour flows and trends in Irish
construction. They find that there is neither a significant number of unemployed construction workers
nor a significant number of construction workers who have dropped out the workforce and are currently
residing in Ireland. The decline in the size of the construction workforce, they find, is instead explained
by emigration. Certainly, large outward migration is consistent with the skills shortage story in the
pre-recovery years. Employers might have had trouble filling roles despite there being widespread
unemployment as those skills left the country.
Figure 4:
Figure 4: Growth
Growthininconstruction andand
construction economy-wide earnings
economy-wide and hours.
earnings and hours.
Source:
Source:CSO.
CSO.
Finally, Figure 4 shows the growth of hourly earnings and average hours worked in the construction
sector and all sectors since 2008. Growth in earnings and average hours worked are indicative of a
labour shortage as recruitment difficulties bid-up the wages of existing workers, who are typically
asked toFinally,
work longer hours.
Figure 2012, the
4 shows when the economy
growth of hourlystarted to recover,
earnings is shown
and average as worked
hours the baseinyear.
the
Again, selected
construction values
sector of the
and series are
all sectors also2008.
since shown.
Growth in earnings and average hours worked are
indicative of a labour shortage as recruitment difficulties bid-up the wages of existing workers,
As can be seen, the growth in both hourly earnings and hours worked in construction have outstripped
who are typically asked to work longer hours. 2012, when the economy started to recover, is shown
the rest of the economy since 2012. Although construction wages lag the rest of the economy by just
as the base year. Again, selected values of the series are also shown.
over two euros, construction earnings have grown by 12.1 percent while hourly earnings in the general
economyAs cangrown
have be seen,
by the
8.6 growth
percent.in
A both hourly
similar story earnings
is true of and hours
hours worked
worked, in have
which construction
grown byhave
4.8
outstripped the rest of the economy since 2012. Although construction wages lag the rest of the
economy by just over two euros, construction earnings have grown by 12.1 percent while hourly 17
earnings in the general economy have grown by 8.6 percent. A similar story is true of hours
worked, which have grown by 4.8 percent compared to 2.5 percent for the general economy. ThatJob quality in the Irish construction sector
percent compared to 2.5 percent for the general economy. That both construction wages and average
hours worked have grown is further evidence of shortages in the sector. That these have grown faster
than the general economy is evidence of pressures specific to the sector, and not merely a result of the
general upturn.
A variety of forms of evidence can therefore be offered to show that the Irish construction sector has
suffered from labour and skills shortages since the economic and property sector collapse of 2008/09.
This includes surveys of the sector and wage and labour market trends. The divergence between
construction and the general economy, though significant, is probably not large enough to be consistent
with the survey finding that labour shortages have been the number one issue holding back supply.3
Nevertheless, recruitment problems have undoubtedly played an important role, among other factors.
The following section turns its attention to the construction workforce and looks at some of the central
issues in job quality.
3 It might be observed that in 2006 housing output was over four times what is was in 2019 while the workforce was
only somewhat smaller – Q4 2019 construction employment was around two thirds Q4 2006 (CSO, 2020).
18Job quality:
Profile and
contractual terms
19Job quality in the Irish construction sector
Job quality: Profile and
contractual terms
A demographic profile of construction
Before job quality in construction is considered in detail, it is useful to provide a demographic profile of
the sector. As well as being of interest in its own right, it provides insights into the dynamics of working
conditions and job quality. What we see is that there is a significant immigrant workforce who are
disproportionately represented in less-skilled occupations. The construction sector is, moreover, male-
dominated, especially the on-site workforce. Greater diversity, then, would help the sector expand.
An important methodological point relates to how the construction sector should be defined. The
standard definition is based on the NACE4 classification of sectors. NACE is, in turn, based on international
standards that see construction as ‘economic activity directed to the creation, renovation, repair or
extension of fixed assets’ (OECD, 2013; emphasis added). Given the emphasis on direct construction
activity, construction activities further down the value chain are excluded. When the net is cast
more widely so as to include architects working as consultants (who are defined as service workers),
manufacturing firms making building materials, and other downstream activities, the contribution of
construction to the economy in terms of output may be more than double than what the conventional
statistics indicate (Green, 2020; see also Squicciarini and Asikainen, 2011). Unless otherwise stated, this
report utilises the conventional definition of construction worker as per NACE. Nevertheless, it is worth
bearing in mind that this definition does not capture those who work in the sector but do not necessarily
work on site.
Figure 5 below shows construction employment, male construction employment, and Irish born
construction employment as percentages of total employment.5 As can be seen, construction
employment grew throughout the 2000s up to the crisis, after which it stabilised. As discussed
previously, the pattern of employment reflects the boom and bust cycle, and the size of the workforce
is now in line with international norms. The sector is highly masculinised, albeit the latest year of data
shows a considerable drop compared to the previous year. In 2019, the sector recorded the highest
share of women in construction in at least two decades at 7% of workers compared to 4% in 2000.
The trend in foreign-born workers entering the sector is more marked. In general, one expects
construction to have a high share of immigrant workers as construction companies do not have the
option of off-shoring parts of the production process to reduce costs, so they instead on-shore foreign
labour. Moreover, construction workers need not deal with the public so native language proficiency is
not a necessity (Krings et al., 2011). Up until the mid-2000s 92-93% of the workforce were Irish born. This
fell to 80% in 2007 which is where it stands at today. These figures may understate the true extent of
foreign workers in the sector as the Labour Force Survey only surveys people ‘usually resident’ in the
country. As a result, it would not capture those who come and work only for a short period of time, which
may be a significant share of the foreign-born workforce. It would also not capture undocumented (i.e.
4 Nomenclature générale des Activités économiques dans les Communautés Européennes or European
Classification of Economic Activities.
5 Note that construction employment peaked at 13 percent in Figure 4 whereas previously we stated it peaked
at 11 percent as per CSO data. This seems to be a result of the methodological change in sector classification in the
microdata, whereas CSO produces a consistent series.
20language proficiency is not a necessity (Krings et al., 2011). Up until the mid-2000s 92-93% of
the workforce were Irish born. This fell to 80% in 2007 which is where it stands at today. These
figures may understate the true extent of foreign workers in the sector as the Labour Force Survey
only surveys people ‘usually resident’ in the country. As a result, it would not capture those who
come and work only for a short period of time, which may be aJob quality: Profile and contractual terms
significant share of the foreign-
born workforce. It would also not capture undocumented (i.e. illegal) workers. The increase in
foreign-born workers
illegal) workers. in the 2000s
The increase reflects the
in foreign-born expansion
workers in the of the EU
2000s to the
reflects theeast in 2004ofand
expansion the the
EU
more
to the liberal
east in approach
2004 and Ireland
the more favoured as other Ireland
liberal approach EU countries adopted
favoured as other transitional
EU countriesrestrictions
adopted
(ibid: 4). restrictions (ibid: 4).
transitional
Construction employment (% of total employment)
14
12
10
8
6
4
2
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Construction employment share Male Irish born
Figure 5: Construction employment in Ireland.
Figure 5: Construction employment in Ireland.
Source: Labour Force Survey microdata.
Source: Labour Force Survey microdata.
Turning now to the occupational profile, a number of broad professional categories can be distinguished.
We haveTurning
chosen now
six, listed
to thein occupational
Table 1 in order of qualification
profile, a number and/or status.
of broad Management
professional comprises
categories can7.3%
be
of construction We
distinguished. workers
haveand includes
chosen six, senior
listed project
in Tablemanagers, company
1 in order directors, civil
of qualification engineering
and/or status.
managers, andcomprises
Management similar roles. Professionals
7.3% constitute
of construction just over
workers and8% and include
includes seniorengineers, architects,
project managers,
land surveyors,
company accountants,
directors, lawyers,managers,
civil engineering and other andhighly qualified
similar roles.personnel. Associate
Professionals professionals,
constitute just over
who make up 4.3%, are somewhat less qualified and include estimators, building
8% and include engineers, architects, land surveyors, accountants, lawyers, and other highly surveyors, site
managers, health and safety inspectors, estate agents, and so on. One in twenty workers are clerical
and other, which is predominantly clerical support workers such as administrators and receptionists. It
also captures any residual occupations not falling under the other categories. At 57.3% of construction
workers, craft workers are the backbone of the industry. This group includes tradespeople such as
bricklayers, electricians, plumbers and certain types of machine operators. Finally, manual workers
such as less-skilled machine operators, cleaners, labourers, and other lower-skilled occupations, are
18% of workers in the sector. As before, the data does not identify construction workers working outside
the construction industry, such as an electrician working for a manufacturing firm.
21Job quality in the Irish construction sector
% of total % male % female % Irish % non-Irish
Management 7.3 91.1 8.9 89.1 10.9
Professional 8.1 78.3 21.7 80.7 19.3
Assoc. prof. 4.3 82.0 18.0 80.1 19.9
Clerical/other 5.0 16.3 83.7 80.2 19.8
Craft 57.3 99.0 1.0 81.6 18.4
Manual 18.0 99.8 0.2 71.9 28.1
Table 1: Occupational profile of Irish construction by gender and country.
Source: LFS microdata 2019.
Notes: Occupational groups follow ISCO-08 classification system except categories 8 and 9 are amalgamated
into manual while clerical denote 4-6.
The construction sector is not known for its gender diversity, an issue that has been brought into
sharper focus in recent years given the sector’s labour shortages. The only occupational group in which
women form a majority is clerical workers. This mirrors the broader economy where most clerical
workers are women and is not peculiar to construction. Craft and manual occupations, who form three
quarters of the construction workforce and mostly work ‘on-site’, are the most heavily male-dominated
professions. This is also reflected, though to a lesser extent, in the small share of women who choose
to study engineering, manufacturing and construction (EMC) courses - around 13% of female leaving
cert students choose EMC courses in the CAO application (Delaney and Devereux, 2019: 12). Ireland is
somewhat below the EU average where just under a fifth of EMC graduates are women (EIGE, 2017: 26).
There is clearly scope for improvement.
There are also few women in professional and associate professional roles in construction. Without
a more detailed breakdown of these occupational groups beyond scope of this report, one cannot
say whether female engineers, for example, are underrepresented in the construction industry (given
there are comparatively few female engineers overall). Available evidence indicates the share in
construction is in line with the share entering the field. For instance, 9% of civil engineers in construction
are women (SkillsIreland, 2020: 23), and 9% of engineers in general are women (Engineers Ireland, 2018).
Delaney and Devereux (2019) find that leaving cert subject choice is the strongest predictor of men
and women entering science, technology, engineering, and mathematical fields. However, women
who study engineering are much less likely than men to enter the field (Fingleton et al., 2014). For
higher occupational grades, then, diversity policies would best focus on encouraging girls and women
to study the construction-related courses in the education system, and reducing the attrition rate
amongst those who do study them.
Managerial positions are almost as male-dominated as on-site occupations. Within managerial roles,
moreover, the share of women falls with seniority – just 3% of CEOs in the sector are women (CIF, 2018).
This at least partly reflects broader, economy-wide trends for which there are a variety of reasons. This
includes discrimination, particularly against mothers. The single largest proximate cause, though, is
fewer female applicants as after a certain level of career attainment women are less likely to apply
for those top-tier, long-hour, and family-unfriendly positions (see, for review, Sweeney, 2020: 42-46).
In addition to cleaning up the image of the sector and general public policies such as greater state
investment in childcare, efforts to promote more family-friendly workplaces would encourage more
women to apply for top roles. Affirmative action policies such as quotas are a more direct avenue to
improve diversity in management.
22Job quality: Profile and contractual terms
Looking at the share of non-Irish born workers, manual occupations are most likely to use immigrant
labour. The share of non-native born craft workers is considerably lower and on a par with more
qualified occupations. This may reflect the difficulty that non-Irish workers have in getting their
qualifications recognised. Eastern European workers, for instance, may therefore gravitate towards
manual occupations (Krings et al.).
Stability and precariousness in construction work
The construction sector is highly cyclical. As property is the largest and most important purchase an
individual or household will make, it typically requires a loan from a financial institution. This means that
construction is highly reliant on banks’ willingness to lend, which is itself very dependent on the state
of the overall economy and level of interest rates. During a downturn construction employment tends
to fall more than in other sectors but then tends to increase more during an upturn (Leamer, 2007;
Gjerstad and Smith, 2014). This is especially the case in Ireland where state investment in public housing
and infrastructure has contributed to as opposed to mitigated construction cyclicality. This greater
volatility and cyclicality makes construction a high-risk industry, which is reflected in the contractual
arrangements the sector employs.
Another distinctive feature of construction work is its difficulty to be standardised. Given building
takes place on distinct tracts of land and the character of each building will vary based on taste and
project viability, each undertaking has a one-off character. This limits economies of scale and learning-
by-doing. As a result, the construction sector tends to have many small and micro-firms which are
often subcontracted by better-resourced firms for large projects. From an employment perspective,
the sector relies on regular pools of workers hired and re-hired on temporary contracts and/or as
self-employed agents (Nisbet, 2007). Wickham and Bobek’s qualitative analysis (2016) suggests that
construction firms are more reliant today than in the past on employment agencies. This is more the
case for the less-skilled manual workers than craft workers.
Figure 6 below shows the evolution and extent of temporary contracts within the sector, among
craft workers within the sector, and in the rest of the economy. The measure of temporary workers
includes seasonal workers, workers hired by an employment agency, and other workers hired for a
specific purpose for limited duration. It excludes apprentices. As can be seen temporary contracts were
relatively uncommon for most workers in the first half of the 2000s but became more widespread as
the decade progressed. As the crisis deepened, so did the use of temporary workers as almost one
in ten construction workers were on temporary contracts in 2012. As the sector recovered the use of
temporary workers became less common. The trend for craft workers is similar though during the crisis,
their employment contracts appear to have been more stable. For both groups, however, temporary
work is more common today than it has been historically. The latest year of data shows that 5.7% of all
workers in the sector were on temporary contracts.
23workers as almost one in ten construction workers were on temporary contracts in 2012. As the
sector recovered the use of temporary workers became less common. The trend for craft workers
is similar though during the crisis, their employment contracts appear to have been more stable.
For both groups, however, temporary work is more common today than it has been historically.
TheJob quality in the Irish construction sector
latest year of data shows that 5.7% of all workers in the sector were on temporary contracts.
Temporary contracts (% total)
12
10
8
6
4
2
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Construction Craft Rest of economy
Figure 6: Temporary contracts in construction.
Figure 6: Temporary contracts in construction.
Source: LFS microdata.
Source: LFS microdata.
Notes: Because of a change in classification system, the definition of craft worker is somewhat different
Notes: Because of a change in classification system, the definition of craft worker is somewhat different in
2012 and after compared to pre-2012.
Interestingly, it appears to be changes in the mid-2000s, as much as the financial crisis, that are
responsible for the increased prevalence of temporary contracts. If 2006 were used as the starting year
temporary contract use would be seen to have reverted to historical norms. The greater use of temporary
contracts was an economy-wide phenomenon as the rest of the workforce experienced a similar jump.
Moreover, the rest of the economy makes greater use of temporary workers than construction. This is
a surprising outcome given that construction given the discontinuous or ‘lumpy’ nature of construction
output, which would be reflected in a comparatively high demand for temporary workers.
Another measure of precariousness is the extent to which workers work part-time. As part-time work
is a valid form of employment that many workers favour, the figure below looks at workers who are
working part-time involuntarily. Because the construction sector is so male-dominated, and men are
less likely to work part-time, we would ordinarily expect part-time work, voluntary or involuntary, to be
less common than most other sectors. We would also expect part-time work to vary strongly with the
economic cycle as employers may prefer to retain the more skilled workers at reduced hours. This may
be a more effective way in the long term to reduce costs during a recession than firing and re-hiring
when as the economy recovers.
24dominated, and men are less likely to work part-time, we would ordinarily expect part-time work,
voluntary or involuntary, to be less common than most other sectors. We would also expect part-
time work to vary strongly with the economic cycle as employers may prefer to retain the more
skilled workers at reduced hours. This may be a more effective way in the long term to reduce
costs during a recession than firing and re-hiring when as the economy recovers.
Job quality: Profile and contractual terms
Involuntary part-time (% total)
14
12
10
8
6
4
2
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Construction Craft Rest of economy
Figure 7: Involuntary part-time work in construction.
Figure 7: Involuntary part-time work in construction.
Source: LFS microdata.
Source: LFS microdata.
Notes: Data for 2005 were missing.
Notes: Data for 2005 were missing.
The trajectory of involuntary part-time work is more or less as expected. Comparatively few general
construction and craft workers were working part-time pre-crisis, especially at the height of the boom
in 2006. Then, during the crisis, involuntary part-time work became more common. Indeed, such work
was more common in construction than the rest of the economy given the disproportionate impact the
recession had on the sector. Since the economic recovery, involuntary part-time dropped significantly
and is current just above what it was in 2000.
Another form of precariousness that is considered very prevalent in construction is so-called bogus
self-employment. In and of itself, self-employment need not be an indicator of precariousness. A self-
employed person normally has control over their work with significant, if not decisive, control over how
the work is done. A problem arises if a nominally self-employed person is contracted who is in reality
subordinate like an employee is. This may be done so as to avoid the usual obligations an employer
has to his or her employee, such as payment of social insurance. There are generally fewer obligations
when a person is defined as an independent contractor. The lengthening of the contracting chain
means that fewer workers are employed by the main contractor. For Wickham and Bobek (2016: 46-49),
this coupled with the removal of administrative obstacles to designating workers as contractors has led
to an increase in bogus self-employment in the Irish construction sector.
Figure 8 shows the share of the workforce that are self-employed without employees. This is how bogus
self-employment is typically approximated, but is not the same thing as it also captures workers who
are legitimately self-employed. However, if the share of legitimate solo self-employment is relatively
constant or slow to change, then large changes in the rate point to increases or decreases in bogus
self-employment. As is apparent, solo self-employment was relatively stable in the 2000s and actually
fell during the height of the bubble as the labour market tightened. In fact, for much of the early part of
that decade, solo self-employment was not much more common in the construction sector compared
to the wider economy. The arrival of the recession did much to alter this balance and resulted in a
25Job quality in the Irish construction sector
significant increase. At its peak in 2013, 28.3% of workforce were solo self-employed, well over double
the rest of the economy. Though that figure has now fallen to one in five workers, it is still just over
double the rate of the rest of the economy. The growth is solo self-employment relative to the wider
economy since the recession points to higher levels of precariousness, notwithstanding it being an
imperfect measure of bogus self-employment.
Solo self-employment (% total)
45
40
35
30
25
20
15
10
5
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Construction Craft Rest of economy
Figure 8: Solo self-employment in construction.
Figure 8: Solo self-employment in construction.
Source: LFS microdata.
Source: LFS microdata.
Solo self-employment is clearly driven by craft workers. Around two in five were solo self-employed in
Solo 28.9%
2013, while self-employment
are today. Asiscraft
clearly driven
workers by craft
have oftenworkers. Around
moved from two
site to inand
site fivefrom
wereemployer
solo self-to
employed
employer,inthey2013,are while 28.9%
likely to are as
be hired today. As craft workers
independent have
contractors. often
The use moved from sitecontractors
of independent to site and is
from
likelyemployer
to be more tocommon
employer, they are
in private likely toconstruction
residential be hired asthanindependent contractors.
in industrial The
construction anduse of
public
independent
works. Labour
6 contractors
standardsisarelikely to belikely
generally moretocommon
be higherinin private residential
public projects and in construction than in
the private, industrial
6
industrial construction and public works. Labour standards are generally likely to
projects where firms tend to be larger. Such firms have greater capacity to observe regulations and may be higher in
public
be moreprojects
willingand in the
to do so private, industrial projects
given reputational concernswhere firmsagreements
or explicit tend to be larger.
(DrukerSuch firms have
and White, 2013).
greater
Clearlycapacity
there hasto observe
been regulations
a structural andthe
shift since may be more
financial crisiswilling to dothis
which made so form
given reputational
of precariousness
concerns or explicitatagreements
more permanent, least compared(Druker and White,
to temporary 2013).
and Clearly
part-time work.there has been a structural shift Commented
since the financial crisis which made this form of precariousness more permanent, at least for evidence
In sum, the
compared nature andand
to temporary cyclicality of construction
part-time work. work means its workforce is more susceptible to
precariousness. What makes construction more precarious is its high levels of solo self-employment,
In sum,elevated
which remain the nature
sinceand cyclicality
the financial crisis.of
7 construction work means its workforce is more
Temporary contracts are actually more common outside
I deleted refe
susceptible to precariousness.
of construction, What
while involuntary makes
part time construction
work is in linemore
withprecarious
the rest of is itsworkforce.
the high levelsTemporary
of solo White citatio
7
self-employment,
contracts are also which remain today,
more common elevated since
within andthe financial
outside crisis. Temporary
of construction, contracts
while involuntary are
part-time
actually
work hasmore common
returned to its outside oflow
pre-crisis construction,
for all of thewhile involuntary part time work is in line with
economy.
the rest of the workforce. Temporary contracts are also more common today, within and outside
of construction, while involuntary part-time work has returned to its pre-crisis low for all of the
6 Based on a conversation with a construction worker.
7 Summing the three measures, up to 28.2% of workers experience precariousness in construction compared to
6
Basedfor
20.7% onthe
a conversation with a construction
rest of the economy. worker.
We say up to, as many workers experience more than one form of precariousness so
7 that the percentage
Summing of workforce
the three measures, up who experience
to 28.2% someexperience
of workers form is less than the sum of
precariousness in the three figures.
construction compared to 20.7%
for the rest of the economy. We say up to, as many workers experience more than one form of precariousness so that
the percentage of workforce who experience some form is less than the sum of the three figures.
26Job quality:
Income and pay
27Job quality in the Irish construction sector
Job quality: Income and pay
This section looks at income generation through an examination of productivity, labour market
institutions, and then pay. Irish construction’s disappointing productivity performance combined with
so-called flexible labour market institutions put downward pressure on pay. However, by Irish standards
the construction workforce gets a very high share of the income generated by its sector. The result is
an overall solid pay performance, especially for white-collar workers but less so for blue-collar workers.
Productivity
Productivity describes the efficiency with which production takes place. The more of a good or service
that can be produced with a given set of inputs, the more productive an operation is. It is typically
measured in terms of the volume of output a person produces per hour worked. For instance, a hair
salon would measure productivity as the number of haircuts produced on average per hour worked by
a person. The volume of output is preferred over the monetary value, as to measure output in terms
of value would yield higher productivity if prices were increased, independent of any efficiency gains.
Similarly, it is important to measure at the individual as opposed to firm level, as to use only firm output
per hour could yield higher productivity if a firm hired more workers.
The capacity of any sector to generate income is dependent on a variety of factors. This includes the
demand for goods or services it creates, the degree of competition, and the extent of regulation. For
instance, the demand for tech products has increased enormously in the last number of years which
helps explain why the sector is so profitable. Over the long run, however, it is the capacity of a sector to
generate productivity which determines how much income it creates, income which gets distributed
to owners and workers.
Productivity in Ireland is high by EU standards, especially in the multinational sector. Ireland’s system of
innovation, however, is less geared toward the domestic sector and more towards attracting external
investment compared to other countries. For instance, Ireland has historically spent less on R&D and
infrastructure than its European peers. Accordingly, the productivity performance of the domestic
sector is more modest (Goldrick-Kelly and McDonnell, 2017; Goldrick-Kelly and MacFlynn, 2018).
The previous section discussed some features of construction labour markets which also bears on the
sector’s income-generating capacity. McKinsey (2017) highlights a number of factors which contribute
to the sector’s low productivity. This includes a non-standardised output, cyclicality, informality,
fragmentation, corruption, and poor risk-reward alignments in contracts. McKinsey also point to high
dependence on public sector contracts and regulation as holding back productivity. This results in
under-investment in skills development, R&D and innovation. Larger firms which manage civil and
industrial contracts are more productive than the smaller, specialised entities they subcontract to, but
not massively so (ibid.).
A recent analysis of the Irish construction sector echoes many of these points (DPER, 2020b). In addition
to high cyclicality, holding back productivity growth at the planning/ pre-production stage are, it is
argued, a complex planning system and poor procurement practices. Interestingly, the report also notes
a reliance on precarious workers such as agency workers and bogus self-employment as inhibiting
productivity (ibid.: 8-9). Other problems include underuse of technology and off-site production, poor
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